Greece, Italy on an upswing: Italy FinMin

It may be time to begin re-investing in peripheral Europe, Italy's Finance Minister has told CNBC.

Speaking on the sidelines of the European House-Ambrosetti Forum on Sunday, Pier Carlo Padoan said his country was at the start of a positive economic cycle just as Greece's investment prospects were starting to bloom.

Italy's jobless rate was down 0.5 percentage points in July from a month earlier, to a two-year low of 12 percent according to the country's national statistics agency, Istat.

Padoan said the latest data were a welcome relief.

"It signals the economy is picking up and it's picking up with more jobs than expected," he said, crediting structural measures across tax regimes and the introduction of a controversial jobs act introduced by Prime Minister Matteo Renzi earlier this year.

"We all know that structural reform takes time to deliver fruits and increasingly so over time. So I would like to say that we are at the beginning of a positive cycle. More jobs also boosts confidence with households so they will spend more money, also because they have due to tax benefits," Padoan said.

With growth targets already achieved for 2015, positive data achieved throughout the rest of the year will only extend the country's gains, he explained.

The government is now focusing on how to address a wealth creation gap between Italy's north and south which recently reached a 15-year high.

CNBC

Italian Finance Minister Pier Carlo Padoan is bombarded by press on the sidelines of the European House-Ambrosetti Forum.

"We have to tackle that seriously, but the bottom line is that the strategy of the rebirth of the country is good for the north and the south," Padoan said, adding that there would be an emphasis on public infrastructure investment in the south, and possibly new tax benefits, provided they are consistent with European competition rules.

Italy has also been plagued with over 350 billion euros worth of non-performing loans (NPL), which still sit on bank balance sheets. Padoan said the idea of creating a consolidated "bad bank" had not been shelved.

"The government has introduced measures to accelerate dramatically getting rid of NPLs on the market. If we can add to that some form of "bad bank" which is being discussed with the [European] Commission competition rules, then this will further accelerate the process but I am positive that with some additional growth, getting rid of NPL will accelerate also on a market basis."

Greece on the rise

Padoan added that while Greece has some challenges ahead, the time was right to start investing in the country.

"Over the next five to 10 years, you will find that its reforms are implemented, potential growth will go up, inefficiencies will go down, jobs will go up, confidence will be rebuilt.

"So it's like an emerging economy in its upswing phase."

Greece is still working with creditors for final implementation of a third bailout after coming to a general reforms-for-aid deal earlier this summer.

But now the country's Prime Minister Alex Tsipras has resigned amidst rebelling in his left-wing Syriza party. Tsipras is widely expected to regain leadership following elections later this month, but until then, it's feared that debt load negotiations could be on hold.

Padoan denied concerns over a potential delay.

"I think we will find a very viable solution over the next few months. In the mean time I think what Greece needs is a stable government and of course it's up to the Greek people to decide who has the majority."